loan-modification

Vocabulary Word

Definition

'Loan modification' is when a lender and borrower agree to change the repayment terms or the interest rates of a loan. It usually happens when the borrower has trouble paying back the money.

Examples in Different Contexts

For debt restructuring, 'loan modification' involves renegotiating the loan terms to make repayment more manageable for the borrower. A debt relief advisor might explain, 'Through loan modification, we can extend your loan term or reduce your interest rate, easing the financial burden.'

Practice Scenarios

Business

Scenario:

Considering your current cash flow situation, it might be helpful to revisit your loan agreement and think about possible changes.

Response:

I would appreciate that. If we went for a loan modification, how could it impact my monthly repayments?

Legal

Scenario:

From a legal standpoint, it would be worthwhile to explore options for renegotiating certain terms of your loan agreement.

Response:

I would definitely be interested in exploring loan modification. What would be the legal implications?